S04268 Summary:

BILL NOS04268
 
SAME ASNo same as
 
SPONSORHOYLMAN
 
COSPNSR
 
MLTSPNSR
 
Add Art 29-BB SS527 & 527-a, Gen Bus L
 
Prohibits certain practices by businesses making an automatic renewal or continuous service offer to consumers in the state.
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S04268 Actions:

BILL NOS04268
 
03/18/2013REFERRED TO CONSUMER PROTECTION
01/08/2014REFERRED TO CONSUMER PROTECTION
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S04268 Floor Votes:

There are no votes for this bill in this legislative session.
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S04268 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          4268
 
                               2013-2014 Regular Sessions
 
                    IN SENATE
 
                                     March 18, 2013
                                       ___________
 
        Introduced  by  Sen. HOYLMAN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Consumer Protection
 
        AN ACT to amend the general business law,  in  relation  to  prohibiting
          certain practices by businesses making an automatic renewal or contin-
          uous service offer to consumers in the state
 

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Legislative intent. It is the intent of the legislature  to
     2  end  the  practice of ongoing charging of consumer credit or debit cards
     3  or third party payment accounts without the consumers' explicit  consent
     4  for ongoing shipments of a product or ongoing deliveries of service.
     5    § 2. The general business law is amended by adding a new article 29-BB
     6  to read as follows:
     7                                ARTICLE 29-BB
     8                     PROHIBITED SERVICE OFFER PRACTICES
     9  Section 527. Definitions.
    10          527-a. Unlawful practices.
    11    §  527.  Definitions.  For the purposes of this article, the following
    12  definitions shall apply:

    13    1. "Automatic renewal" means a plan or arrangement  in  which  a  paid
    14  subscription or purchasing agreement is automatically renewed at the end
    15  of a definite term for a subsequent term.
    16    2.  "Automatic  renewal  offer  terms"  means  the following clear and
    17  conspicuous disclosures:
    18    a. that the subscription or purchasing agreement will  continue  until
    19  the consumer cancels;
    20    b.  the  description  of  the  cancellation policy that applies to the
    21  offer;
    22    c. the recurring charges that will be charged to the consumer's credit
    23  or debit card or payment account with a third party as part of the auto-
    24  matic renewal plan or arrangement, and that the amount of the charge may
 

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09647-01-3

        S. 4268                             2
 
     1  change, if that is the case, and the amount to  which  the  charge  will
     2  change, if known;
     3    d.  the  length  of  the automatic renewal term or that the service is
     4  continuous, unless the length of the term is chosen by the consumer; and
     5    e. the minimum purchase obligation, if any.
     6    3. "Clear and conspicuous" or "clearly  and  conspicuously"  means  in
     7  larger  type than the surrounding text, or in contrasting type, font, or

     8  color to the surrounding text of the same size,  or  set  off  from  the
     9  surrounding text of the same size by symbols or other marks, in a manner
    10  that  clearly  calls  attention to the language. In the case of an audio
    11  disclosure, "clear and  conspicuous"  and  "clearly  and  conspicuously"
    12  means  in  a  volume  and  cadence  sufficient to be readily audible and
    13  understandable.
    14    4. "Consumer" means any individual who seeks or acquires, by  purchase
    15  or lease, any goods, services, money, or credit for personal, family, or
    16  household purposes.
    17    5.  "Continuous  service"  means  a  plan  or  arrangement  in which a
    18  subscription  or  purchasing  agreement  continues  until  the  consumer
    19  cancels the service.

    20    §  527.  Unlawful  practices. 1. It shall be unlawful for any business
    21  making an automatic renewal or continuous service offer to a consumer in
    22  this state to do any of the following:
    23    a. fail to present the automatic renewal  offer  terms  or  continuous
    24  service  offer  terms  in  a  clear  and  conspicuous  manner before the
    25  subscription or purchasing agreement is fulfilled and in visual proximi-
    26  ty, or in the case of an offer conveyed by voice, in temporal proximity,
    27  to the request for consent to the offer;
    28    b. charge the consumer's  credit  or  debit  card  or  the  consumer's
    29  account  with  a  third  party  for  an  automatic renewal or continuous
    30  service without first obtaining the consumer's  affirmative  consent  to

    31  the agreement containing the automatic renewal offer terms or continuous
    32  service offer terms; or
    33    c.  fail  to  provide  an  acknowledgment  that includes the automatic
    34  renewal or continuous service  offer  terms,  cancellation  policy,  and
    35  information regarding how to cancel in a manner that is capable of being
    36  retained  by the consumer. If the offer includes a free trial, the busi-
    37  ness shall also disclose in the acknowledgment how to cancel  and  allow
    38  the  consumer  to  cancel  before  the  consumer  pays  for the goods or
    39  services.
    40    2. A business making automatic renewal or  continuous  service  offers
    41  shall  provide  a toll-free telephone number, electronic mail address, a

    42  postal address only when the seller  directly  bills  the  consumer,  or
    43  another  cost-effective, timely, and easy-to-use mechanism for cancella-
    44  tion that shall be described in the acknowledgment  specified  in  para-
    45  graph c of subdivision one of this section.
    46    3.  In  the  case  of  a material change in the terms of the automatic
    47  renewal or continuous service offer that has been accepted by a consumer
    48  in this state, the business shall provide the consumer with a clear  and
    49  conspicuous  notice  of  the  material  change  and  provide information
    50  regarding how to cancel in a manner that is capable of being retained by
    51  the consumer.
    52    4. The requirements of this article shall  apply  only  prior  to  the

    53  completion  of the initial order for the automatic renewal or continuous
    54  service, except as follows:
    55    a. The requirement in paragraph c of subdivision one of  this  section
    56  may be fulfilled after completion of the initial order.

        S. 4268                             3
 
     1    b.  The  requirement  in  subdivision  three  of this section shall be
     2  fulfilled prior to implementation of the material change.
     3    5.  In  any  case in which a business sends any goods, wares, merchan-
     4  dise, or products to a consumer, under a continuous service agreement or
     5  automatic renewal of a purchase, without first obtaining the  consumer's
     6  affirmative  consent,  the  goods, wares, merchandise, or products shall

     7  for all purposes be deemed an unconditional gift to  the  consumer,  who
     8  may  use or dispose of the same in any manner he or she sees fit without
     9  any obligation whatsoever  on  the  consumer's  part  to  the  business,
    10  including,  but  not  limited to, bearing the cost of, or responsibility
    11  for, shipping any goods, wares, merchandise, or products  to  the  busi-
    12  ness.
    13    6.  a.  Notwithstanding  the  provisions  of  subdivision  one of this
    14  section, a violation of this section shall not  be  a  crime;  provided,
    15  however,  that all available civil remedies that apply to a violation of
    16  this article may be employed.
    17    b. If a business complies with the provisions of this article in  good

    18  faith, it shall not be subject to civil remedies.
    19    7. The following are exempt from the requirements of this article:
    20    a.  any  service  provided by a business or its affiliate where either
    21  the business or its affiliate is doing business pursuant to a  franchise
    22  issued by a political subdivision of the state;
    23    b. any entity regulated by the department of financial services;
    24    c. security system alarm operators;
    25    d.  banks,  bank  holding companies, or the subsidiary or affiliate of
    26  either, or credit unions or other financial institutions, licensed under
    27  state or federal law; and
    28    e. service contract sellers and service contract administrators.
    29    § 3. This act shall take effect on the ninetieth day  after  it  shall

    30  have become a law.
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